Emerging Markets: LatAm assets rebound as dollar weakens, global yields retreat

Vale

19/08/2026 16:33

MSCI Latin America equity index headed for its best day this month
30-year US Treasury yield falls nearly 10 basis points
Dollar falls 0.7%, easing pressure on emerging-market currencies
Brazil's stocks eye end to 11-session losing streak
By Ragini Mathur
Aug 19 (Reuters) - Latin American stocks and currencies rebounded on Wednesday from the previous session's losses, as a sharp drop in the U.S. dollar and a pullback in global bond yields offered relief to the region's markets. 
  The MSCI Latin America equities index .MILA00000PUS jumped 1.9%, while a regional currency gauge .MILA00000CUS climbed 0.5%. Both were still on track for their strongest daily performance so far this month.
Regional assets had come under pressure on Tuesday as a surge in long-term global borrowing costs rattled investors, who were concerned about rising government debt and persistent inflation, partly fueled by higher oil prices due to the ongoing Iran war. 
Higher global yields tend to weigh on emerging-market assets, as they make relatively safer developed-market debt more attractive to investors.
On Wednesday, however, yields retreated from multi-decade highs after the U.S. Treasury Department said it would increase liquidity support for longer-dated securities. US/
The benchmark 30-year U.S. Treasury yield US30YT=RR fell nearly 10 basis points to 5.187%, after touching its highest level since 2007 on Tuesday.
The dollar =USD fell 0.7% to multi-month lows, easing pressure on emerging-market currencies despite continued uncertainty over the Middle East conflict. 
"Certainly, we've seen buyers come in to lift the dollar every time there has been an escalation in U.S.-Iran hostilities," said David Morrison, senior market analyst at Trade Nation. "Yet the U.S. dollar must contend with a new headwind as expectations for Fed rate hikes this year have been dialled down sharply."
Investors were also awaiting minutes from the Federal Reserve's July policy meeting, when it left interest rates unchanged. Fed Chair Kevin Warsh had unsettled markets by offering few clues on how policymakers might respond to persistent inflation.
"Today's main event is the release of minutes from the Federal Reserve's last FOMC meeting. Traders will be hoping to glean some clues," Morrison added.
Brazil led regional gains, with the Bovespa .BVSP rising 1.8% and set to end an 11-session losing streak. The real BRL= gained about 1%.
Brazilian assets have recently been weighed down by the central bank's restrictive policy stance and political uncertainty ahead of October's elections.
Fuel retailer Vibra Energia VBBR3.SA advanced 4.4%. The company highlighted its expansion of higher-margin diesel products for the mining sector, including a premium fuel tested by Vale VALE3.SA that it says improves efficiency and fuel economy.
Mexican stocks .MXX rose 0.3%, on track to snap a four-day losing streak, while the peso MXN= gained 0.6% to levels not seen since 2024. Bloomberg News reported on Tuesday that Mexico was considering additional trade restrictions on selected Chinese and other foreign products, along with higher import tariffs.
Bucking the trend, Colombian stocks .COLCAP were down 0.2% and the peso COP= was edging 0.1% higher.
Colombia's imports rose 26.44% year-on-year to $6.394 billion in June, from $5.058 billion a year earlier.

Key Latin American stock indexes and currencies at 15:01 GMT:

Stock indexes
Latest
Daily % change
MSCI Emerging Markets .MSCIEF
1673.52
-1.24
MSCI LatAm .MILA00000PUS
2982.99
1.89
Brazil Bovespa .BVSP
169311.68
1.79
Mexico IPC .MXX
64219.63
0.45
Chile IPSA .SPIPSA
11268.55
0.73
Argentina MerVal .MERV
2916242.66
0.85
Colombia COLCAP .COLCAP
2456.9
-0.18
 
Currencies
Latest
Daily % change
Brazil real BRL=
5.1721
0.88
Mexico peso MXN=
16.9537
0.62
Chile peso CLP=
918.45
0.94
Colombia peso COP=
3092.16
0.14
Peru sol PEN=
3.3567
0.27
Argentina peso (interbank) ARS=RASL
1,497.5
-0.13
Argentina peso (parallel) ARSB=
1,545.0
0.64



 (Reporting by Ragini Mathur in Bengaluru; Editing by Aurora Ellis)
 ((Ragini.Mathur@thomsonreuters.com;))